Interview with Jun Nakata, Director - Sales and Marketing, India Yamaha Motor Pvt. Ltd.

Company Description: Yamaha made its initial foray into India in 1985. In August 2001, Yamaha India became a 100pc subsidiary of Yamaha Motor Co., Ltd, Japan (YMC). In 2008, Mitsui & Co., Ltd. entered into an agreement with YMC to become a joint-investor in the motorcycle manufacturing company ‘India Yamaha Motor Private Limited (IYM)’. IYM operates from its manufacturing units at Surajpur in Uttar Pradesh and Faridabad in Haryana and produces motorcycles both for domestic and export markets. With a workforce of more than 2,000 employees, IYM has a countrywide network of over 400 dealers. At present, its product portfolio includes VMAX (1,679cc), MT01 (1,670cc), YZF-R1 (998cc), FZ1 (998cc), Fazer (153cc), FZ-S (153cc), FZ (153cc), SZ, SZ-X & SZ-R (153cc), YZF-R15 Version 2.0 (150cc), SS125 (123cc), YBR 125 (123cc), YBR 110 (106cc) and Crux (106cc).

For long, Yamaha was almost in a dormant state. Are things finally looking up for your company? Are you satisfied with the progress of the company in India?

So far no, we are not satisfied with how we have progressed. This is because the Indian motorcycle market is very huge. But our volumes are still low. We are trying to catch up by streamlining our operations. 

There has been a lot of buzz that India Yamaha is now working on low-cost bikes positioned below the Crux? Could you please run us through it?

Yes, low-cost motorcycles in the entry-level segment (100-125cc) are very important for us. This segment is very popular in India. Basically, we are trying to expand the Crux range of motorcycles to meet the low-cost segment products. For the future, we are developing more attractive 100cc bikes. And a product below Crux, benchmarked at US$ 500 (27,500 approx. at current prices), is definitely an option we are looking at.

All eyes are now on the Ray-concept based scooter that you are planning to launch this year. When will it be getting launched? And will there be only a single product based on that concept?

At the Auto Expo 2012, we have also announced that we will be launching our Ray-based scooter by the second half of this year. It’s very much on schedule. The scooter will be branded ‘Ray’. As the next step, we will prepare variants of the same category.

What are the current and new markets for your product’s shipment to countries abroad?  When and where are you planning to export your scooter?

We are exporting our bikes to a lot of Asian and African countries and also to Central South American nations. In the future, we will expand our reach in African markets as it is so huge.  And of course, we will try to export our scooters to certain countries. So far, we are just negotiating with a few countries.

Yamaha would be setting up a factory in Tamil Nadu.  Have you zeroed in on Chennai because of its proximity to port?

Yes, that’s right. This location has been chosen because of its proximity to the Chennai port. The factory will initially roll out small numbers. Gradually, we will be ramping up our output. In the final phase, we would have a capacity of around 1.8 million units. Around 3,000 people will be employed at the plant.

What has been the response to your superbikes?  How many units have you sold to date? Is there any new superbike in the pipeline? And can we expect signature showrooms for such luxury motorcycles?

We are able to sell around 150 units per year.  And of course, we have lined up a lot of CBUs (superbikes) for the next few years. We are just working out the models suitable for India. . Unfortunately, the size of the big bike market in India is low. But it is witnessing unprecedented demand. And yes, we are studying the feasibility of having exclusive showroom for luxury motorcycles.

So are you looking at assembling these high-capacity motorbikes?

At the moment, we are just studying such a possibility. Definitely, such a move will reduce taxes and we can pass on the benefits to our customers. But, we are yet to take a call on this.

Will you foray into the used-bike business?

Until now, Yamaha has never entered the second-hand bike business. Over a period of time we have to consider entering into pre-owned bike business.

Could you talk about your finance arm? Is it providing tailor-made finance solutions to your customers?

Our finance arm---Bussan Auto Finance India Pvt. Ltd. (BAF India) is a Non Banking Finance Company established with a view to finance Yamaha two wheeler vehicles across India.  It was set up with a view to enrich the lifestyle of Indian society through customer-friendly and quality financial services and to become the most preferred financier for customers and dealers of Yamaha two wheelers across India setting a benchmark in the industry. Things are progressing well at the moment.

Do you have any plans to relaunch ‘Enticer’ cruiser? Or, in fact the Enticer brand?

So far, we are concentrating on 150cc segments with FZ, SZ, R15 etc. And as I said, a scooter is also coming up. The ‘Enticer’ cruiser is definitely on our wishlist. Indian customers look for cruisers. So we are studying and also considering it.

With the rise in petrol prices, do you think bike sales will get impacted? Or do you see incremental volumes? What about electric scooters, like in China? Is India not ready for such scooters?

With the increase in fuel prices, motorcycle and scooter sales go up. This is because of the mileage factor. A four-wheeler customer will also buy a two-wheeler to save his fuel bills. There is a lot of scope for the e-two-wheeler industry to grow. And we are also eyeing that segment in India.

Last year, you had launched R15 2.0. So how has the response been for this product? Has it exceeded your expectations?  Will you be able to hold on to the demand?

So far, our R15 sales have been quite good. In fact, there is a waiting period for it. I’m sure; we will be able to sustain the current demand.

Do you have any plans to enter the premium segment by launching 250cc bikes or so? What about a 250cc Fazer?

Unfortunately, I cannot reveal our future strategies. But what I can say is that a 250cc segment is one of the potential categories. We can introduce a 250cc Fazer too.

What kind of expansion plans are you going in for in your current vehiclemaking plant at Surajpur? What is your sales target for the next fiscal? And what would be your distribution network by that time?

We are under process to expand our capacity at the Surajpur factory. Finally, we can produce 1 million units per annum in two shifts. For this fiscal, we are targeting 6.5 million units in sales, out of which 4.5 million units would be accounted for from the domestic market. By that time, 1,300 sales outlets would be set up from 1,000 currently.

Latest media reports suggest that Yamaha India is planning to set up an in-house R&D centre? Is that true? If yes, how much have you earmarked for it?

Although we have not arrived at any amount, yet we have firmed up our plans for an R&D centre in India. Our aim is to create a typical Indian product from scratch. Details pertaining to location, size, etc have not been finalised.

How important is the Indian market for Yamaha India. How much, in terms of percentage, is it contributing to your global operations? And by 2020, what should be your marketshare?

I would say India is a very important market for Yamaha globally. But it is very difficult to specify the contribution from the Indian market. What I can say is that our market share is only 3pc and by 2020 we are eyeing a 20pc marketshare.